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Except for statements of historical fact, the information presented herein constitutes forward-looking statements. All forward-looking statements are subject to certain risks, uncertainties and assumptions which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks and uncertainties include but are not limited to, general economic and business conditions, government regulations, our ability to integrate and consolidate our operations, our ability to expand our operations in both new and existing markets, the ability of our review of strategic alternatives to maximize stockholder value and the effect of growth on our infrastructure. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated. The forward-looking statements in this news release should be read in conjunction with the more detailed descriptions of the above factors located in our Annual Report on Form 10-K under Part I, Item 1A “Risk Factors” as well as those additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. All information in this release is as of the date hereof. We undertake no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company's expectations. Except as required by law, the Company assumes no obligation to update or revise any forward-looking statements in this press release, whether as a result of new information, future events, or otherwise.

API Technologies Corp.

Financial Results

For the Three and Twelve Months Ended November 30, 2012

Consolidated Statement of Operations (unaudited)

in thousands USD

For the Three

For the Three

For the Twelve

For the Twelve

Months Ended

Months Ended

Months Ended

Months Ended

Nov. 30,

Nov. 30,

Nov. 30,

Nov. 30,

2012

2011

2012

2011

Revenue, net

$

62,749

$

75,082

$

280,820

$

197,569

Cost of revenues

Cost of revenues

49,344

57,121

214,460

154,875

Restructuring charges

706

195

10,336

1,514

Total cost of revenues

50,050

57,316

224,796

156,389

Gross profit

12,699

17,766

56,024

41,180

Operating expenses

General and administrative

7,024

5,105

26,825

23,908

Selling expenses

3,940

3,504

15,753

12,057

Research and development

2,406

2,636

10,297

6,176

Business acquisition and related charges

584

638

4,027

13,436

Restructuring charges

2,631

1,453

7,366

4,446

16,585

13,336

64,268

60,023

Operating income (loss)

(3,886

)

4,430

(8,244

)

(18,843

)

Other expenses (income), net

Goodwill impairment

—

—

111,300

—

Interest expense, net

4,311

3,328

16,209

7,729

Amortization of note discounts and deferred financing costs

727

524

15,684

3,900

Other expense (income), net

3,225

228

898

(329

)

8,263

4,080

144,091

11,300

Loss from continuing operations before income taxes

(12,149

)

350

(152,335

)

(30,143

)

Expense (benefit) for income taxes

154

2,837

(3,632

)

(12,851

)

Income (loss) from continuing operations, net of income taxes

(12,303

)

(2,488

)

(148,703

)

(17,292

)

Income (loss) from discontinued operations, net of income taxes

—

—

—

(36

)

Net income (loss)

$

(12,303

)

$

(2,488

)

$

(148,703

)

$

(17,328

)

Income (loss) per share from continuing operations—Basic and diluted

$

(0.22

)

$

(0.05

)

$

(2.69

)

$

(0.40

)

Income (loss) per share from discontinued operations—Basic and diluted

$

0.00

$

0.00

$

0.00

$

0.00

Net income (loss) per share—Basic and diluted

$

(0.22

)

$

(0.05

)

$

(2.69

)

$

(0.40

)

Weighted average shares outstanding

Basic

55,368,033

52,404,074

55,314,263

43,177,538

Diluted

55,368,033

52,416,071

55,314,263

43,177,538

Consolidated Balance Sheets (unaudited)

in thousands USD

November 30,

November 30,

2012

2011

Assets

Current

Cash and cash equivalents

$

20,535

$

15,689

Restricted cash

700

700

Accounts receivable

45,229

52,983

Inventories, net

67,962

72,017

Deferred income taxes

1,101

4,797

Prepaid expenses and other current assets

2,644

1,705

138,171

147,891

Fixed assets, net

41,792

44,149

Fixed assets held for sale

900

3,217

Goodwill

156,002

253,170

Intangible assets, net

50,090

50,001

Other non-current assets

9,344

8,019

Total assets

$

396,299

$

506,447

Liabilities and Shareholders’ Equity

Current

Accounts payable and accrued expenses

$

41,487

$

46,002

Deferred revenue

385

1,892

Current portion of long-term debt

2,328

1,917

44,200

49,811

Deferred income taxes

3,410

9,905

Other long-term liabilities

1,048

—

Long-term debt, net of current portion and discount

183,087

165,267

231,745

224,983

Preferred Stock, net of discounts

25,581

—

Shareholders’ equity

Common stock

55

55

Special voting stock

—

—

Additional paid-in capital

326,973

322,675

Common stock subscribed but not issued

2,373

2,373

Accumulated deficit

(192,513

)

(43,810

)

Accumulated other comprehensive income

2,085

171

138,973

281,464

Total Liabilities and Shareholders’ Equity

$

396,299

$

506,447

Consolidated Adjusted EBITDA

in thousands USD

The following table reconciles three and twelve months GAAP net loss to non-GAAP Adjusted EBITDA from continuing operations.

Three Months Ended

Twelve Months Ended

November 30,

November 30,

2012

2011

2012

2011

Net income (loss)

$

(12,303

)

$

(2,488

)

$

(148,703

)

$

(17,328

)

Adjustments

Interest expense, net

4,311

3,328

16,209

7,729

Amortization of note discounts and deferred financing costs

727

524

15,684

3,900

Depreciation and amortization

5,045

4,056

18,230

10,619

Goodwill impairment

—

—

111,300

—

Income taxes

154

2,837

(3,632

)

(12,851

)

Stock based compensation

290

128

2,224

2,900

Restructuring

3,337

1,650

17,702

5,960

Acquisition related charges

584

638

4,027

13,436

Other adjustments (A)

4,884

—

6,283

92

Spectrum acquisition inventory fair value

—

732

—

1,704

SenDEC earn-out reversal

—

—

(2,213

)

—

C-MAC pro-forma adjustment

924

—

2,100

—

Foreign exchange (gain) loss

301

42

425

42

Discontinued operations

—

—

—

36

Adjusted EBITDA

$

8,254

$

11,447

$

39,636

$

16,239

Adjusted EBITDA Margin

13.2

%

15.2

%

14.1

%

8.2

%

(A)

Charges in 2012 primarily relate to non-cash inventory provisions, a $1.9 million impairment write-down on assets held for sale ($1.8 million in Q4-2012), and a $1.1 million loss contingency accrual in Q4-2012.

Additional Adjusted EBITDA Reconciliations

in thousands USD

The following table reconciles three months GAAP net loss to non-GAAP Adjusted EBITDA for our reportable segments for the quarter ended November 30, 2012.

SSC

SSIA

Sub-total

SSC & SSIA

EMS

Corporate

Total

Q4

Q4

Q4

Q4

Q4

Q4

Revenue

$ 48,721

$

3,370

$

52,091

$

10,658

$

-

$

62,749

Net Income (loss)

(1,999

)

(246

)

(2,245

)

(2,906

)

(7,152

)

(12,303

)

Adjustments

Interest expense, Net

1,850

(2

)

1,848

86

2,377

4,311

Amortization of note discounts and deferred financing costs

-

-

-

-

727

727

Depreciation & amortization

4,011

134

4,145

820

80

5,045

Goodwill impairment

-

-

-

-

-

-

Income taxes

(119

)

(42

)

(161

)

10

305

154

Stock based compensation

-

-

-

-

290

290

Restructuring

880

634

1,514

1,749

74

3,337

Acquisition related charges

8

-

8

-

576

584

C-MAC pro-forma adjustments

924

-

924

-

-

924

Other adjustments (A)

3,313

-

3,313

373

1,198

4,884

Foreign exchange loss

-

-

-

-

301

301

Net corporate costs (B)

(950

)

(66

)

(1,016

)

(208

)

1,224

-

Add-Back Total

9,917

658

10,575

2,830

7,152

20,557

Adjusted EBITDA

$ 7,918

$

412

$

8,330

$

(76

)

$

-

$

8,254

Adjusted EBITDA Margin

16.3

%

12.2

%

16.0

%

-0.7

%

13.2

%

(A)

Charges relate to non-cash inventory provisions.

(B)

Net Corporate costs are allocated to the three segments by percentage of total consolidated revenues.

Additional Adjusted EBITDA Reconciliations

in thousands USD

The following table reconciles three months GAAP net loss to non-GAAP Adjusted EBITDA for our reportable segments for the quarter ended November 30, 2011.

SSC

SSIA

Sub-total

SSC & SSIA

EMS

Corporate

Total

Q4

Q4

Q4

Q4

Q4

Q4

Revenue

$ 45,651

$

6,456

$

52,107

$

22,975

$

-

$

75,082

Net Income (loss)

1,617

658

2,275

340

(5,103

)

(2,488

)

Adjustments

Interest expense, Net

-

9

9

-

3,319

3,328

Amortization of note discounts and deferred financing costs

-

-

-

-

524

524

Depreciation & amortization

2,832

84

2,916

1,120

20

4,056

Goodwill impairment

-

-

-

-

-

-

Income taxes

2,578

225

2,803

3

31

2,837

Stock based compensation

-

-

-

-

128

128

Restructuring

554

442

996

564

90

1,650

Acquisition related charges

150

-

150

-

488

638

Spectrum fair value adjustments

732

-

732

-

-

732

Foreign exchange loss

32

18

50

-

(8

)

42

Net corporate costs (A)

(311

)

(44

)

(355

)

(156

)

511

-

Add-Back Total

6,567

734

7,301

1,531

5,103

13,935

Adjusted EBITDA

$ 8,184

$

1,392

$

9,576

$

1,871

$

-

$

11,447

Adjusted EBITDA Margin

17.9

%

21.6

%

18.4

%

8.1

%

15.2

%

(A)

Net Corporate costs are allocated to the three segments by percentage of total consolidated revenues.